Everyone likes to talk about how fast kids grow. Your baby is learning to crawl one moment, and before you know it, he is crossing the stage at his high school graduation. But the reality is children don't suddenly double or triple in size overnight. It takes several years, at least!

The same rules apply when it comes to saving for retirement. What's more, the younger you are when you start trying to raise a retirement fund, the easier the experience will be. That's because you'll benefit from compound interest—or interest earned on top of interest.

Say you start saving at age 25 and put aside $3,000 a year in a tax-free savings account for ten years–and then you stop saving altogether. By the time you reach 65, your $30,000 investment will have grown to $171,237 (assuming an 5% annual return). Not bad, considering you didn't contribute a dime beyond age 35.

Now, let’s say you put off saving until you turn 35 and save $3,000 a year for ten years. By the time you reach 65, you will have set aside $30,000 of your own money, but it will only grow to $105,125, assuming the same 5% annual return. That’s a $66,112 difference!

Before you get depressed and stop reading, remember this: it's never too late to start saving! So even if you would have, should have, or could have started earlier, starting to save today is still better than investing two years from now.

How much do you need?
Most individuals will need a retirement income equivalent to between 60% and 90% of their pre-retirement income to maintain their current standard of living during their retirement years. You can considerably reduce the amount you need to save every month to reach your retirement goal by saving earlier rather than later.

Remember, retirement doesn't just mean not having to go to work anymore. It means not drawing a regular paycheque anymore too. So the younger you are when you plan to retire and the more lavish your retirement dreams, the larger nest egg you'll need to build.

What do you want to do when you retire anyway? Do you want to travel the world, own a vacation home, start a second business, play golf or go to the spa every day? If you've got some big plans and are getting a late start, you might find building a retirement fund demands more of you. Getting sound advice
No matter how old you are, it’s important to get good advice. Our Alterna Wealth team can help you figure out a savings plan that will let you enjoy your retirement. If you’re still paying off old debt, making mortgage payments, or needing to save for your children’s education, we’ll help you figure out a way to manage these competing priorities.

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